BP Alaska Penalized $25 Million for Alaskan North Slope Oil Spill

05/04/2011 |

The U.S. Environmental Protection Agency (EPA), the U.S. Department of Justice and the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA) have announced that BP Exploration Alaska, Inc. will pay a sum of $25 million in civil penalties for spilling more than 5,000 barrels of crude oil on the North Slope of Alaska.

This penalty is the largest per-barrel penalty of any recorded oil spill.

“Today’s settlement with BP Alaska imposes a tough penalty and requires the company to take action to prevent future pipeline oil spills on the Alaska North Slope,” says Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “The Clean Water Act gives the U.S. authority to assess higher penalties when oil spills are the result of gross negligence, and this case sends a message that we intend to use that authority and to insist that BP Alaska and other companies act responsibly to prevent pipeline oil spills.”

The incident occurred in March, 2006, when BP Alaska spilled around 5,054 barrels of crude oil on the North Slope in Alaska – followed by a second spill of 25 barrels in August 2006. The spills were determined to have occurred as a result of failure of BP Alaska to properly inspect and maintain the pipeline.

PHMAS issued a Corrective Action Order to BP Alaska that addressed the pipeline’s risks and ordered pipeline repair or replacement. When BP Alaska did not fully comply with the terms of the corrective action, PHMSA referred the case to the Department of Justice.

Of the $25 million penalty, $20.05 million will be deposited in the Oil Spill Liability Trust Fund established under the Clean Water Act. The remainder, $4.95 million, will be paid to the U.S. Treasury. The funds paid to the Oil Spill Liability Trust Fund will be used to finance federal response activities and provide compensation for damages sustained from future discharges or threatened discharges of oil into water or adjoining shorelines.

The consent decree is subject to a 30-day public comment period and final court approval.